Egypt to top $10billion FDI target this year, Minister says
August 3, 2017 | 8:52 am| | | Start Conversation
- Egypt may exceed its $10 billion target for foreign direct investment this year as the weaker pound reduces the cost of doing business in North Africa’s largest economy and a new investment law comes into force, the investment minister said.
Sahar Nasr told Bloomberg she had been approached by investors from Saudi Arabia, Singapore, China and the United Arab Emirates — including Emaar Properties PJSC Chairman Mohamed Alabbar and Al Ghurair Group — about potential investments. The pipeline for the fiscal year that began July 1 includes oil and gas, real estate, tourism and logistics investments, she said in an interview in Cairo on Monday. Nasr said it was too early to comment on the size of the potential deals.
The Egyptian pound has halved in value against the U.S. dollar since the central bank removed most currency controls in November, helping to end a foreign currency shortage and secure a $12 billion loan from the International Monetary Fund. The government also embarked on a structural reform program that includes subsidy cuts and new taxes to control its ballooning budget deficit.
“With the devaluation, the cost of labor — blue or white collar — is lower than elsewhere,” Nasr said, adding that even with recent reductions in fuel subsidies, the cost of energy in Egypt remains less than in neighboring countries or other emerging economies. “Egypt sure has an edge.”
Egypt received about $8.7 billion in foreign direct investment in the fiscal year ended June 30, Nasr said, an increase from $6.9 billion a year earlier but below its $10 billion target. U.S. investors have also expressed an interest in doing deals, while companies that are already in Egypt, including Mars Inc. and General Electric Co., are planning to expand, she said.
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